Pakistan’s steel product and ferrous scrap imports are expected to increase in July driven by a recovery in demand. The projected growth is mainly on the back of lowered customs duties in the financial budget announced for the FY21 beginning July 1.
In July, increasing production rates, falling ferrous scrap inventories, and tightened domestic scrap supply gave imported ferrous scrap prices a lift in Pakistan. The Davis Index for US-origin containerized shredded settled at $289/mt cfr Qasim on July 17, up by $15/mt from $274/mt cfr Qasim on July 1.
From late June, Pakistan increased bids for imported scrap over other South Asian buyers. In the last two weeks, around 12,000-15,000mt ferrous scrap was imported into Pakistan. Finished steel prices have remained unchanged amid low yet steady demand.
According to the Pakistan Bureau of Statistics, ferrous scrap imports in July are expected to rebound after witnessing a drop in June amid COVID-19 related restrictions. Brazilian and European suppliers have managed to fill in the void left by the export ban in countries like UAE and South Africa.
In June 2020, the country imported 277,020mt of ferrous scrap, down by 11.7pc from 313,725mt in May 2020. Ferrous scrap imports in June were worth PKR17.67bn ($107mn). From a year ago, ferrous scrap imports dropped by 9.3pc from 305,508mt.
In FY20 (July 2019 to June 2020) ferrous scrap imports into Pakistan totaled 3.90mn mt, down by 14pc from 4.55mn mt in the prior year.
Iron and steel products
In June 2020, the country imported 225,698mt of steel products,down by 7.9pc from 245,166mt in May 2020. Iron and steel products imports in June were worth PKR22.58bn or $136mn. Steel imports dropped by 26.5pc from 307,075mt in June 2019.
In FY20 steel imports into Pakistan were 2.42mn mt, down by 26pc from 3.28mn mt in the prior year.